Section — Gury-Ballerini, Compendium of Moral Theology (8th ed., 1884)
§ 1. On Retrovendition and Mohatra
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- Retrovendition is a contract 1 by which the seller reserves to himself the right of redeeming his own thing, under the condition that he repair expenses, improvement, or similar things.
1 The word retrovendition in reality of itself does not signify a contract by which something is sold or bought with a pact of reselling or redeeming, but merely signifies the act of reselling, both if this is done from a preceding pact, and if it is done with no preceding pact.
Mohatra is a species of retrovendition, or a contract by which someone sells a thing at a higher price on credit, with a pact that the buyer resell it to him at a lower price, with money counted out. - See below Q. 3.
I say I. The contract of retrovendition is wholly lawful. This is clear from Sacred Scripture, which testifies that such a pact was imposed on the Jews. Then it has nothing which contradicts natural right: for provided that a true purchase is made, and no cloaked usury intervenes, the seller is free to dispose of his own thing as he wills; nor does he inflict any injury on the buyer, since the latter freely agrees concerning retrovendition and does not otherwise suffer damage in this. - St. Lig. n. 812 and all others.
I say II. The conditions required for this are 1. that the price be diminished according to the estimation of the burden which is imposed on the buyer; 2. that there not be a pact concerning retrovendition to be made at a higher or lower price: a pact is lawful that it be resold at the same price, although the thing increases in price; 3. that it not be exacted by pact that the risk of the thing sold fall to the damage of the seller, since of itself that pertains to the buyer; unless, however, the price is increased according to the estimation of the risk; 4. that the thing be resold as it is handed over, vacant or with fruits; add from Gallican law, that it not be done beyond five years. - Civil Code 1660.
- Questions. - Q. 1. By how much must the price decrease in a contract of retrovendition?
Resp. A precise rule cannot be determined, but the decision for the most part depends on various circumstances; hence authors disagree on this: for some say that the price decreases up to the fourth part, others up to the third, others better to the judgment of prudent men. - See St. Lig. n. 812.
- Q. 2. Whether a pact of redeeming the thing at the judgment of the buyer is lawful?
- Q. 3. What must be thought concerning mohatra?
Resp. It is a contract usurious per se, and therefore illicit and unjust. Hence it was proscribed by Innocent XI in the condemnation of prop. 40, which lies thus: The contract mohatra is lawful, even with respect to the same person, and with a contract of retrovendition previously entered into with the intention of gain. But the reason for the condemnation is that in that contract cloaked usury lies hidden; but if the thing is resold without any previous pact, even at the lowest price, to the same seller, it is not illicit per se.
Yet that contract is not to be condemned if the profit received from it does not exceed the legal rate for a mutuum, because then it would fall back into a legitimate mutuum 2. - See Cases, n. 945.
2 Elsewhere we have already warned that the word mutuum is used here in an abusive or broader sense; for otherwise, although perhaps it would be employed among the ancient Roman jurists, certainly in the ecclesiastical sense, which thereafter everywhere prevailed as the only proper one, it signifies a gratuitous contract.
A certain recent mercantile operation occurs, which is referred to retrovendition; it is called report (report). Such a manner of trading consists especially in rights, or shares (actions), to money placed with mercantile companies, being sold and bought again. That kind of commerce has not yet been weighed by theologians. It is also practiced here and there by upright men, nor is it apprehended by them as usurious, because it is true trade, to which laws are not opposed, indeed to which public authority gives patronage. Therefore this species of retrovendition does not seem to be condemned per se. Yet it would easily savor of the stain of usury and smell of mohatra, unless it were confined within just limits. - See Cases, n. 917.